At Zapolis & Associates, PC, in Illinois, we know that many people neglect to make a will or engage in any other estate planning throughout their entire lives. Other people, however, take a much more thoughtful and reasoned approach to their ever-growing estates so as to ensure that they not only attain their financial goals, but also that their assets ultimately go to the people they want them to. If you are one of these latter people, you may wish to establish a living trust to protect your assets.
As RBC Wealth Management explains, you set up a living trust, often called an inter vivos trust, during your lifetime, placing whatever assets you wish into it. You then designate yourself and anyone else you wish as beneficiaries of the trust. You likewise can appoint yourself as trustee. In addition, you decide how long you want your living trust to remain in existence, such as for a specified period of years, throughout your lifetime, or throughout the lifetime of the last surviving beneficiary.
Living trust benefits
You retain total control over whatever assets you place in your living trust if you appoint yourself as trustee. In other words, you continue managing them just as you do now. In addition, if you name yourself as one of your trust's beneficiaries, you continue to receive the income the trust's assets produce. Your living trust provides you with additional benefits as well, including the following:
- You have complete freedom to change its provisions whenever you wish or even to revoke it.
- You may receive substantial tax benefits.
- You can appoint a successor trustee to take over your trust's management if you become disabled or incapacitated or when you die.
- You keep your financial dealings private since your trust is a private document, not a public one like your will.
Coordinating your trust with your will
Speaking of wills, you should make a new pour-over will at the same time you set up your living trust, Why? Because this is how you instruct your will's executor to pour over any asset you own at your death into your living trust that you forgot or neglected to place there during your lifetime.
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